Eurozone business activity picks up in October

Business activity in the 18-nation eurozone strengthened slightly in October, a key survey showed Thursday, but overall the economy remained weak with new orders low and pressure on prices.
Markit Economics said its Composite Purchasing Managers Output Index (PMI) rose marginally to 52.2 points in October from a 10-month low of 52.0 points in September.
While higher, the reading "was the second-weakest reading this year" and below the average seen in the year to date, the survey said.
"The rough patch is not over, with many details in the PMI survey warranting caution," Berenberg Bank economist Christian Schulz said.
Alarmingly, the survey picked up an unexpected slowdown in new orders which registered "the smallest monthly improvement since orders began rising in August of last year," Markit said.
This indicated that a much needed recovery in the eurozone economy was stalling and will raise fears that the bloc could soon dip back into recession.
Price drops were also a source of worry, with Markit noting that average prices charged for goods and services "showed the largest monthly fall since February 2010".
Prices in the eurozone, where fears of damaging deflation are rife, have "now fallen almost continually for just over two-and-a-half years," Markit added.
By country, France saw a big deterioration in business activity, with employment also suffering. French prices sank at the fastest rate since 2009, Markit said. Job shedding was at its fastest pace since April 2013.
Germany's PMI index hit a three-month high however, a welcome respite after a raft of poor data out of Europe's economic growth-engine.
"In all, the survey does little to reduce the risk that the single currency area is entering its third recession in six years," analysts from Capital Economics said in a note.